Tag Archives: ECB

Defend the Greek workers! Oppose the diktat of Schäuble and Merkel!

By Partei für Soziale Gleichheit
July 14, 2015
World Socialist Web Site

 

The Partei für Soziale Gleichheit (PSG—Socialist Equality Party) denounces the agreement forced on Greece by German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble at Sunday’s euro group summit. We call upon workers in Germany and throughout Europe to declare their solidarity with the workers in Greece and organize mass resistance to the policies of the German government.

The new austerity demands, to which the government of Greek Prime Minister Alexis Tsipras capitulated on Monday morning, go far beyond the measures the Greek population rejected, by a large majority, in the referendum held just one week before. For millions of Greeks, the implementation of these measures means poverty, unemployment, disease and even death. Greece will be transformed into a de facto protectorate of Germany and the most powerful European financial interests.

The troika (European Union, European Central Bank and International Monetary Fund) is returning to Athens and will dictate government policy. The role of parliament is to be reduced to rubber-stamping austerity measures and signing off on automatic budget cuts. State property valued at €50 billion will be transferred to a fund, to be sold off to the highest bidder, modeled on the Treuhandanstalt, set up in 1990 to liquidate state property in East Germany.

The agreement amounts to a carte blanche for the ruthless exploitation and plundering of the Greek working class.

Even establishment commentators could not overlook the agreement’s undemocratic character. In the Financial Times, Wolfgang Münchau accused Greece’s creditors of reverting to “the nationalist European power struggles of the 19th and early 20th century” and transforming the euro zone into a system “run in the interests of Germany” and “held together by the threat of absolute destitution for those who challenge the prevailing order.”

Paul Krugman in the New York Times accused the euro group of “pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

The brutal actions of Schäuble and Merkel recall the darkest chapter in German history. Less than seventy-five years have passed since Hitler’s Wehrmacht occupied Greece, established a brutal regime of terror, and ruthlessly plundered the country. The imposition of high occupation costs, the export of virtually all of Greece’s industrial goods, and the theft of machinery and vehicles led to a famine that took the lives of hundreds of thousands of people.

The Wehrmacht responded to resistance from partisan fighters by massacring the inhabitants of numerous villages, including Distomo, Lingiades and Kommeno. At least 30,000 civilians fell victim to these reprisals. Eight thousand Jews were deported and murdered, and the Jewish community in Thessaloniki, one of the world’s oldest, was completely wiped out. None of the victims were ever compensated, and virtually none of the perpetrators were punished.

Schäuble and Merkel are now walking in the footsteps of their predecessors. The German ruling class is spewing forth all the undigested filth of the past. Their arrogance suggests that they see themselves, once again, as Europe’s master race.

The politicians are supported by a spineless press, for which no cliché or prejudice is too cheap to be hurled at the Greek people. The media spread propaganda and do everything in their power to confuse and mislead the public.

The government also relies on historians such as Jörg Baberowski of Humboldt University, who falsifies history to trivialise German crimes in World War II. It is backed by economists, who declare the impoverishment of the Greek working class a historical necessity, and political scientists, such as Herfried Münkler, who formulates the political arguments for German hegemony in Europe.

All of the parties represented in the German parliament support the government. The Social Democratic (SPD) chairman Sigmar Gabriel has led the way, seeking to outdo Schäuble and Merkel from the right.

They are all convinced that history has been forgotten. But they are deceiving themselves. The working class of Greece, Germany and Europe cannot and will not allow them to repeat Germany’s historic crimes.

The German government is pursuing two goals in its aggressive actions in Greece. It intends to set an example to intimidate all resistance to its austerity course in Europe and Germany. And it seeks to strengthen its hegemonic domination of Europe.

By the time of the 2008 financial crisis, the government had decided that Germany could no longer maintain its dominance through compromises and financial assistance. Germany had to become, in the words of Münkler, Europe’s “taskmaster,” instead of its “paymaster.” Early last year, leading government officials demanded that Germany play a role in Europe and the world that corresponded to its actual influence.

This new great power politics was first tested out in Ukraine, where the German government backed the pro-Western coup that has driven the country to civil war and brought NATO to the brink of a military confrontation with nuclear-armed Russia. These same policies are being continued in what amounts to a civilian coup in Athens.

The face of the European Union has been transformed in the process. It is becoming ever more obvious that the EU is not a mechanism for the peaceful coexistence of Europe’s peoples, but rather an instrument for the predominance of the most powerful imperialist powers and the ruthless exploitation of the working class. Masses of people now view the EU with a mixture of disgust and hatred.

The more openly Germany uses the EU to attain the position of a world power, the more intense the national conflicts within Europe become—above all between Germany and France. Prior to Sunday’s summit there were sharp exchanges between Berlin and Paris, which, due to domestic political considerations, was favoring a more conciliatory course towards Greece. The French government eventually submitted to Germany’s dictates because it fears the threat from its own working class much more than it fears German hegemony. These tensions, however, will flare up again, as will the developing conflict between the US and Germany over who will control Europe.

It is the task of the working class in Germany and throughout Europe to oppose these dangerous actions, which threaten to plunge the working class into desperate poverty, and the continent, once again, into war and dictatorship. To this end, it is vital to draw the lessons of the events in Greece and the role played by Syriza.

It is hard to find a parallel in history to the cowardly and shameful betrayal carried out in the past few days by Tsipras and his government. Elected in January on the basis of a promise to end austerity, Tspiras’ party made one concession after another to Berlin and Brussels.

Finally, it organized a referendum, hoping that a majority would favour the EU-backed austerity measures. Confronted, instead, with an overwhelming majority against austerity, it capitulated completely to the German diktat within a week. Even a right-wing bourgeois government would not have gone so far.

This surrender confirms the PSG’s assessment that Syriza is not a left, and certainly not a socialist, party, but rather a pseudo-left organization representing wealthy, selfish middle class layers primarily concerned with their own well-being. They have nothing but contempt for the working class, which they fear. Their capitulation is grist for the mill of far-right extremists such as Golden Dawn, which, from a reactionary, nationalist standpoint, poses as a more determined opponent of the dictates of Brussels and Berlin than does the supposedly “left” Syriza.

What is true for Syriza also applies, as well, to its international co-thinkers, including the Left Party in Germany and Podemos in Spain.

The Left Party bears immense responsibility for the fate of Greece. In February, it voted for the “aid program” for Greece, including the austerity measures attached to it. Occasionally it criticizes the policies of the German government, in order to maintain a shred of credibility, but it has done absolutely nothing to support the Greek workers.

It has refused to organize a single demonstration in their defense. If the Left Party assumes power in Berlin, it will pursue the same course as Syriza. This has already been proven by its record in power at the state level.

The Left Party works closely with the trade unions, which have sought to aid the German government by shutting down and selling out strikes by train drivers, postal and daycare workers, hospital employees and other professionals.

The working class of Germany must rise to the defense of its class brothers and sisters in Greece. The PSG calls upon all workers involved in social struggles, all young people and the entire working population: Support the Greek workers! Organize solidarity strikes against the dictates of Schäuble and Merkel! Break with the Left Party and the SPD and organize independently!

The fundamental question is the necessity of building a revolutionary leadership—in Greece, Germany and throughout the European continent. Join the PSG, the German section of the International Committee of the Fourth International, and build sections of the ICFI all over Europe that will fight for the unity of the European working class and the establishment of the United Socialist States of Europe!

 

 

Attack on democratic rights in Germany follows Blockupy protest

By Christoph Dreier
March 20, 2015
World Socialist Web Site

Police line in front of the ECB

The German media and politicians have responded to the Blockupy protests against the ECB on Wednesday by denouncing the protesters and demanding restrictions on the freedom of assembly. They seized on clashes prior to the demonstration, involving a few small autonomous and anarchist groups, as a pretext. The protest organisers explicitly distanced themselves from these fringe elements.

On Thursday, a debate in the German parliament was immediately called on the protest in Frankfurt. Interior Minister Thomas de Maizière opened with an aggressive attack on the demonstration organisers, which included trade unions, the Attac anti-globalisation movement, and the Left Party.

“The organisers of the Blockupy alliance are jointly responsible for what happened yesterday,” said de Maizière. “Even the name Blockupy indicates nothing peaceful. It is a combination from blocking and occupying. I don’t think that has much to do with peaceful demonstration.”

In addition, the minister declared that those criticising the massive police intervention were downplaying the violence on the fringe of the protest. De Maizière exaggerated the events, calling them a “swath of destruction,” which were the expression of “blind destructive rage.”

Johannes Kahrs from the Social Democrats (SPD) declared the organisers and the Left Party fraction in parliament to be “supporters” of violence. “What happened there in the morning, the violence that took place, which is unacceptable and occurred with the support of Blockupy and the Left Party, cannot be tolerated,” he said.

In an interview on Thursday morning on RBB Inforadio, Green Party chair Simone Peter declared the organisers were responsible for checking who comes to the protest. The Blockupy alliance had thus damaged Frankfurt’s reputation, said Peter.

The arguments of the political parties’ representatives, repeated in numerous media outlets, are absurd. They are aimed at banning protests and doing away with the basic democratic right of freedom of assembly. If protest organisers are made responsible for every participant’s actions, the door is left wide open for political provocations against any protest or political organisation.

The so-called Black Block, which was responsible for the violence in Frankfurt, is heavily infiltrated by the police and intelligence services, and often functions as provocateurs.

At the same time, the Christian Democrats (CDU), SPD and Greens praised the mass police crackdown in Frankfurt to the skies. “The police are protecting the public good of the freedom of assembly. They deserve our thanks and respect,” said Irene Mihalic from the Green parliamentary fraction. Burckhard Lischka (SPD) said that the police had “defended all of us and our values.” De Maizière referred to a “democracy on guard” that has to defend itself.

In fact, the police did everything to escalate the situation. They transformed the city into a fortress that resembled a police state. 8,000 police and 28 water cannons were assembled from across the country. On the day of the protest, officers repeatedly took brutal measures against demonstrators on their way to the protest or who peacefully blocked roads. They used water cannon, tear gas and batons.

Police marching near the ECB

The hailing of this police violence and the criminalising of the protesters by the political parties is aimed at suppressing all opposition to their social attacks and building up the structures of the state.

In parliament, Mihalic demanded a “debate about the equipment and personnel in the police.” Stefan Mayer from the CDU also called for a “better equipping of our police officers.” In addition, he advocated the strengthening of the criminal offence of “resisting state power.”

The police trade union (DpolG) also demanded stronger laws. DpolG chair Rainer Wendt called in Handelsblatt for “those who refuse to remove themselves from a violent crowd after being ordered to do so to also be prosecuted.” In this way, even participating in a demonstration could be declared a criminal offence.

In its key points for the 2016 federal budget, which were leaked to the media, the government plans to increase police and intelligence services budgets by €328 million by 2019. A total of 750 new posts are to be created. The interior ministry budget will rise 6.7 percent next year.

The buildup of the state and the aggressive support of bourgeois politicians of all stripes for attacks on democratic rights are the direct response to growing social inequality in Europe.

The policy of social cuts, for which the ECB bears considerable responsibility, has led to mass poverty, unemployment and desperation, particularly in the countries of southern Europe. In their negotiations with Greece, it is clear that the European elites are preparing for a new round of social attacks that are to be expanded throughout the whole continent.

Such policies are incompatible with democratic rights for the population. They lead to ever more dictatorial forms of rule, in which all forms of protest are to be suppressed and the population intimidated.

Sharp market falls over euro and oil price slump

By Nick Beams
January 6, 2015
World Socialist Web Site

 

Stock Market DropEuropean and US equity markets fell sharply yesterday as a result of another drop in oil prices, fears of financial instability in Europe over Greek debt and the signs that global deflationary pressures are increasing.

In the US, the Dow Jones index finished the day 331 points down, a fall of 1.86 percent, while the S&P 500 was down by 1.83 percent. The Vix, a measure of market volatility, jumped by 12 percent. Earlier in the day, European markets fell by around 3 percent.

Currency markets also exhibited instability. The US dollar hit a nine-year high against a basket of currencies, while the euro touched a nine-year low, amid concerns over whether the Greek election, to be held on January 25, would spark political instability if the opposition SYRIZA coalition were to win.

The first issue before the incoming Greek government will be to sign off on a new debt agreement. The country was given a two-month extension, to the end of February, on the present bailout plan.

The main factor in the fall in US markets appears to have been the further sharp decline in oil prices, continuing the downward trend that started in June, which was accelerated by the Saudi-led OPEC oil cartel’s decision not to cut production levels.

West Texas intermediate crude yesterday fell below $50 a barrel, its lowest level for five years, while Brent crude, regarded as the global benchmark, dropped by more than 6 percent to under $53 per barrel. The price of oil is now heading down to the levels reached in 2008-2009, when the global financial crisis saw it plummet from $100 per barrel to around $40.

The falling oil price is indicative of the deflationary pressures in the world economy as a result of continuing stagnation in Europe and clear signs that the Chinese economy is slowing.

The drop in the euro was set off by a comment by European Central Bank (ECB) president Mario Draghi during an interview published last Friday. Draghi said the risk of deflation in Europe was higher than six months ago, indicating that the ECB is getting ready to extend its so-called quantitative easing when its governing council next meets on January 22.

The euro fell further on a report published over the weekend in the leading German news magazine Der Spiegel that German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble had reached the conclusion that it was no longer necessary to keep Greece within the euro zone at any price and that a Greek exit would not create a financial crisis, as it threatened to do in 2012.

“The danger of contagion is limited because Portugal and Ireland are considered rehabilitated,” Der Spiegel quoted an unnamed government source as saying. Thus, Germany regarded a Greek exit as “bearable.”

Following the article, the Merkel government said it was working on the assumption that no matter if SYRIZA won the election, the next Greek government would continue to abide by agreements reached with EU institutions.

Under the austerity program dictated by the “troika”—the ECB, the International Monetary Fund and the European Commission—the Greek economy has contracted by 25 percent over the past six years. Even assuming a growth rate of 2 percent per year, the Greek economy would not attain the levels it reached in 2007 until after 2027.

SYRIZA, the “Coalition of the Radical Left,” has abandoned any commitment to repudiate international debts, or restore previous cuts. It now talks of debt “renegotiation,” while insisting that Greece remain within the euro zone.

The financial markets have taken SYRIZA’s measure and recognise that a SYRIZA government of itself is no danger. There is the underlying fear, however, that any election victory could spark a movement from below that could begin to break out of the political straitjacket that has so far contained the working class.

One of the factors that may have led German authorities to consider a Greek exit “bearable” is that Greece’s debt has largely been transferred to public institutions. Consequently, German banks would not be as heavily impacted as they would have been three years ago.

It is estimated that more than 80 percent of Greece’s debt is now held by official creditors, including the International Monetary Fund and the European Stability Mechanism, which functions as the euro zone’s rescue fund.

While the prevailing view in financial circles, at least to this point, is that the euro zone would be able to “handle” a Greek exit, other powerful forces, in the form of deflation and the prospect of a third recession since the financial crisis, are stretching the monetary union.

Inflation figures will be published tomorrow and there are indications that they may record a negative result for the year, after an increase of just 0.3 percent for the year to November. Fears of a negative outcome were increased following yesterday’s news that German inflation had fallen to a five-year low.

Draghi is insisting that the threat of deflation, which increases the level of real debt and interest payments for banks and financial institutions, must be countered by further quantitative easing, involving, in some form, ECB purchases of sovereign debt. However, German Bundesbank president Jens Weidman, who sits on the ECB’s governing council, strenuously opposes the purchase of government debt.

According to former German foreign minister and Green Party leader Joschka Fischer, the policy differences threaten to turn “politically explosive” because they are “becoming a conflict between Germany and Italy.”

Those conflicts are set to intensify. This time last year, the official view was that Europe was starting to recover. But after a brief upturn, growth began to fall, most significantly in the so-called core countries, France, Italy and Germany.

Economic stagnation brings rising debt levels. Despite the imposition of austerity measures, Italy’s debt ratio has increased from 116 percent to 133 percent of gross domestic product (GDP) over the past three years because GDP is not rising fast enough to keep pace with interest costs.

As an article in yesterday’s Wall Street Journal noted, 2014 was supposed to have been the year when the euro zone exited the debt crisis, as growth returned to the region. Instead, “the eurozone is arguably now in greater peril of breaking up than ever before.”